Government "Shutdowns": History and Consequences

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.

October 23, 2015 - 15:37 — Curtis Kalin

During the weeks before fiscal year (FY) 2015 ended on September 30, 2015, many in Washington and across the nation braced for the potential of a “government shutdown.” But, on that last day of FY 2015, Congress passed a short-term continuing resolution (CR) that avoided a shutdown and funded the government through December 11. On October 2, President Obama vowed to veto any further short-term funding bills. With the specter of the second government shutdown in three years looming for the holidays, it is helpful to understand how a shutdown works and what the consequences might be.

The term “shutdown” is misleading: It is really a temporary funding gap during which one stream of funding ends before another is approved. From 1976-79, there were six funding gaps that occurred without much consternation. However, the modern political and legal realities of these events were forever changed in 1980 when President Carter’s new Attorney General, Benjamin Civiletti, issued a pair of legal opinions interpreting the 1884 Antideficiency Act. The first concluded that the work of government could not continue through a funding gap, while the second stated that essential government services would be provided and essential personnel could legally remain working. Civiletti concluded that allowing non-essential government employees to work without being paid meant they would be “illegal volunteers.”

From 1980-2012 there were 11 funding gaps precipitated by various outside political issues. The longest “shutdown” spanned 21 days from December 5, 1995 to January 6, 1996, following a budget standoff between President Clinton and House Speaker Newt Gingrich. Due to the political backlash that engulfed Washington in the months following that shutdown, Congress and the White House were dissuaded from such an event until October 1-16, 2013.

Civiletti’s decision that “essential” employees could remain working allows for most services that impact most Americans to continue. Military, utility, and law enforcement personnel continue to work as they are considered essential for national security purposes, along with most employees of the Social Security Administration (SSA) and Veterans Affairs (VA) hospitals. However, the SSA and VA will not have personnel to process new claims for retirees or for new veterans seeking help. U.S. Embassies and Consulates abroad will also remain open, but their visa and passport processing services might be either delayed or shut down completely, which created a backlog during the 2013 shutdown.

The distinction between essential and non-essential is murky. No clear-cut guidelines exist to determine who falls into which category. Program heads are given the discretion to decide who is considered essential and who is not. For example, the mayor of Washington, D.C. declared all personnel essential during the 2013 shutdown.

The best way to predict what will and won’t be effected would be to use the 2013 shutdown as a guide. In October 2013, the EPA was closed, FDA food inspector operations were suspended, Department of Housing and Urban Development vouchers were not issued, and responses to businesses trying to use E-Verify were delayed. Other agencies engaged in the “Washington Monument Syndrome” by closing the most visible government facilities like national parks, monuments, and museums to pressure lawmakers into a deal.

While those furloughed, non-essential employees have been portrayed as “victims” of a shutdown because they do not get paid, they always receive their paychecks once the situation is resolved.

There are plenty of myths about government shutdowns. The reality lies somewhere between doomsday and a shoulder shrug. Nevertheless, funding gaps should be avoided if at all possible. The easiest way to avoid these situations is for the federal government to complete the budget process on time.